With its bullish attitude, Tyson is more than chicken. One of the largest US chicken producers, Tyson's Fresh Meats division makes it a giant in the beef and pork sectors, as well. The company also offers value-added processed and pre-cooked meats and refrigerated and frozen prepared foods. Its chicken operations are vertically integrated -- the company hatches the eggs, supplies contract growers with the chicks and feed, and brings them back for processing when ready. Tyson processes 42 million chickens, 390,000 pigs, and 144,000 head of cattle every week. Its customers include retail, wholesale, and food service customers in the US and more than 130 other countries. Tyson has bid to acquire Hillshire Brands (maker of Jimmy Dean Sausages).
As part of its operations, the company boasts four business segments: chicken, beef, pork, and prepared foods. Tyson's wholly-owned subsidiary Cobb-Vantress Inc. is a top poultry breeding stock supplier globally that leverages research and development to breed desirable characteristics into its flocks. Tyson is known for its chicken, but it also produces beef and pork products. The company's fresh meat operations process beef and pork, offering processed pork products such as sausage, ham, and bacon. Aside from a significant foodservice operation, Tyson's prepared foods unit produces pizza toppings and frozen entrées. Other Tyson activities include rendering meat by-products and tortilla and pizza-crust manufacturing. While its chicken operations reach from egg to drumstick, Tyson raises no cattle of its own. It buys live cattle on the open market and they're raised under contract at third-party feed lots. The majority of Tyson's swine are bought from producers; however, it does raise some swine and supplies the resultant feeder pigs to independent producers on a contract basis. Altogether, Tyson operates more than 400 facilities and offices in the US and worldwide.
Tyson has been getting into new markets in recent years to add breadth to its products portfolio. Taking advantage of this affinity for animals, the company introduced True Chews, a line of beef, chicken, and ham-flavored dog treats. Banking on a billion-dollar pet treat market, Tyson rolled out the products, sourcing ingredients used in True Chews from the company's meat and poultry operations.
For another venture outside its usual food chain, the company has moved into biofuels. It began supplying the animal fats and greases from its meat production operations to Dynamic Fuels, its Louisiana-based 50:50 joint venture with Syntroleum that produces renewable fuels from the by-products.
Mergers and Acquisitions
In 2014 Tyson inked a deal to acquire Hillshire Brands alongside fellow poultry producer Pilgrim's Pride in a $7.75 billion deal. Hillshire, at the time, was attempting to acquire Pinnacle Foods, but it has since scrapped those plans.
In 2013 Tyson focused on boosting its value-added foods business. Midyear, the company's Tyson Mexican Original subsidiary acquired the assets of Don Julio Foods of Clearfield, Utah. Don Julio Foods specializes in making flour and corn tortillas and salty snacks such as tortilla chips, pretzels, and potato chips. The company also purchased the assets of California's Circle Foods, maker of frozen and refrigerated handheld Mexican foods, uncooked tortillas, and increasingly popular Indian flatbreads.
The company serves customers in the US and in more than 130 countries worldwide. Tyson's major export markets include Brazil, Canada, Central America, China, the European Union, Japan, Mexico, the Middle East, Russia, South Korea, Taiwan, Ukraine, and Vietnam.
Through several plant closings during the past couple years, Tyson has eked out revenue increases following the global recession that took a bite out of its net income. It has also achieved operating income exceeding $1.2 billion for three consecutive years, thanks to noteworthy operating margins, including its 3.8% operating margin in fiscal 2012.
The company boosted its net sales by 3% in fiscal 2012 as compared to 2011. It achieved this by logging higher average sales prices across all its segments except pork. Tight domestic availability of protein and increased live and raw material costs spurred the increases, which were partially offset by declining average sales prices in pork attributable to lower live hog costs. Net income during the same reporting period dropped 22% due to an increase in the cost of sales, thanks to higher input per pound driven by an increase in the cost of live cattle and hogs, grain and feed ingredients, and other growout operating costs in the chicken segment.
Tyson has devoted more dollars to research and development efforts in recent years. Research and development costs totaled $43 million, $42 million, and $38 million in fiscal 2012, 2011, and 2010, respectively.
Tyson Foods is controlled by Tyson Limited Partnership (TLP), a small group of Tyson family relatives, retired Tyson Foods executives, and friends of the late Don Tyson, who led TLP at the time of his death in early 2011.
Sales and Marketing
Wal-Mart accounted for nearly 14% of Tyson's sales for 2012, up from 13% during the two years prior.